Registration and payments

The five weighing methods

Components in scope must have their weight measured according to metric values, using one of five established methods.

These are as follows:

• Individual component method,
• Sample component method,
• Material inputs method,
• Verified specification method,
• Bulk weighing method.

Further information regarding each of these methods is available from HMRC. Only the individual component method requires each component to be weighed individually. Businesses that are manufacturing or importing large numbers of identical components are likely to find one of the other four methods more efficient.

Weighing recycled content

The percentage of recycled content should be considered during the weighing process.

This should be done for each finished component. Further information regarding how to establish the recycled content of a component is available from HMRC.

The registration process

Registration for the tax is via Government Gateway. Where registering a group of companies, it is acceptable for one company in the group to register on the group’s behalf.

Through this approach, a single business in the group can submit reports and pay the tax on behalf of the others. However, each company’s liability for the tax still needs to be assessed individually.

HMRC has defined what constitutes a group of companies.

Filing a return

Detailed information on how to complete a return is available from HMRC.

Returns and payments are due no later than the last working day of the month following the end of each quarter. The first quarter in which the tax applies covers April, May and June 2022. So, returns and payments in respect of the first quarter must be submitted no later than Friday 29 July 2022.

Returns can be submitted online. Businesses have up to four years to correct an error made in a return.

Claiming relief/deferring payment

Under certain circumstances, relief can be claimed against Plastic Packaging Tax, within two years of a component having been manufactured, imported or converted into different packaging. Payment of the tax can also be deferred by up to 12 months under certain circumstances.

For relief against Plastic Packaging Tax to be claimed, one (or both) of the following scenarios must apply:

1. where the component is subsequently exported,
2. where the component is converted into another one.

Examples of how to offset a credit against previously paid Plastic Packaging Tax are available from HMRC.

Relief can be claimed on components that are exported in the same accounting period as that within which the tax would otherwise be due, subject to there being evidence that the export has taken place. Under these circumstances, there is no need for the tax to be paid on the component and then reclaimed through a subsequent return. If a different business to the one that’s in scope exports or converts the component in the same accounting period (and there is supporting evidence of this), HMRC has confirmed the process through which relief can be claimed on the component. Again, under these circumstances, there is no need for the tax to be paid on the component and then reclaimed through a subsequent return.

Businesses can defer payment of the tax for up to 12 months if they intend to export the manufactured or imported component. If the packaging is not exported within 12 months of it being manufactured or imported, the tax becomes due. It’s only possible for a business to defer payment if they themselves are exporting the component. If the component will be exported by another business such as a purchaser, the manufacturer or importer cannot defer payment and must instead account for the tax. They can claim a credit on their return that follows the export having taken place.

It is not possible for payment to be deferred on packaging that’s manufactured or imported with the intention of it being used for transport packaging on the export of goods. It should be included in calculations for the 10-tonne threshold and reported on quarterly returns if the threshold is reached. However, once this packaging is actually exported, a credit can be claimed (subject to the business having evidence to show that the export has taken place).